Demand for travel insurance that covers COVID-19 will drive provider selection
As lockdown restrictions in the UK begin to ease, there will be increasing interest in the possibility of going abroad on holiday. Providers that offer some protection against COVID-19 will become more popular, as travellers will remain wary in the near future.
All new travel insurance policies have various exclusions against coronavirus-related claims. Policies will not payout for trip cancellations, but some policies such as those offered by Staysure and Saga will cover medical expenses and repatriation fees in the event a policyholder contracts COVID-19. These two providers account for 4.8% and 2.1% of travel insurance policies sold in the UK respectively, according to GlobalData’s 2019 UK Insurance Consumer Survey, and will likely become more popular this year as demand for products that cover coronavirus increases. This is especially true among older travellers who are much more likely to become seriously ill if they contract COVID-19.
However, official guidance concerning travel will need to change before policyholders will be able to claim on their policy when travelling abroad. Currently, travel insurance claims are unlikely to be paid, as the official advice warns against all non-essential travel outside of the UK. But with lockdown restrictions easing, and the government finalising plans for travel from the UK to a number of EU countries (and vice versa) without the need to quarantine, this advice may soon change.
Some of the largest players in the travel insurance market, like Nationwide (7.8%), Aviva (7.3%), and Insure & Go (5.4%), that are either not selling new policies or excluding all coronavirus-related events will see a fall in popularity in the coming months if official travel advice changes. However, due to the current uncertainty and risk around travel, it remains to be seen whether that is a negative.